The acquisition of Scripps Networks has boosted revenue and operating income at Discovery Inc., the New York media company specializing in unscripted TV series. But costs associated with the transaction continue to weigh on the company’s bottom line.
The owner of Discovery Channel, Food Network and HGTV said Tuesday that second-quarter profit fell 42% owing to higher restructuring charges and other costs associated with the Scripps purchase, which was completed in March for $14.6 billion in cash and stock. Discovery cited charges of $140 million, or 20 cents per share, for restructuring and other charges and $64 million, or 9 cents per share, for after-tax impact from a gain related to a sale of a majority stake in its education business to Francisco Partners.
Net income fell to $216 million, or 30 cents a share, from $374 million, or 64 cents a share, in the year-earlier quarter. Adjusted earnings per share totaled 66 cents, excluding non-recurring items.
The effects of the merger were still noticeable. Revenue in the period soared 63%, to $2.845 billion from $1.745 billion in the year-earlier period. Revenue at the company’s U.S. networks networks increased to $1.78 billion from $890 million. Revenue at its international networks rose 30% to $1.05 billion from $811 million.
The company “continued to make great progress with our integration of Scripps Networks Interactive,,” said David Zaslav, Discovery’s president and CEO, who articulated a strategy of focusing more intently on “digital, mobile and direct to consumer products and services.”On Monday, Discovery named a former executive from Amazon, Paul Faricy, to oversee its direct-to-consumer and digital operations around the world.